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Exam 5: Business-Level Strategy Creating and Sustaining Competitive Advantages

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Question 21

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Rivals would find it difficult to challenge Atlas Door in the short run because of

A) weak customer loyalty.
B) high barriers to entry.
C) high threat of substitution.
D) low buyer switching costs.

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Question 22

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Which of the following is false regarding how a differentiation strategy can help a firm to improve its competitive position relative to the Porter five-forces model?

A) Firms will enjoy high customer loyalty.
B) By increasing firm margins, it avoids the need for a low-cost position.
C) It reduces buyer power because buyers lack comparable alternatives.
D) Supplier power is increased, because suppliers will be able to charge higher prices for their inputs.

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Question 23

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If the overall cost leadership strategy is to provide sustainable competitive advantage, all activities in the value-chain need to be evaluated including the relationships among the value-chain activities.

In a given market, key technology no longer has patent protection, experience is not an advantage, and there is a growing need to compete on price. What stage of its life cycle is themarket in?

In the ________ stage of the industry life cycle, the emphasis on product design is very high, the intensity of competition is low, and the market growth rate is low.

In the ________ stage of the industry life cycle, there are few segments, the emphasis on process design is low, and the major functional areas of concern are general management and finance.

Which of the following is not a potential pitfall of a focus strategy?

A risk for a firm that tries to attain both cost and differentiation advantages is that it can be stuck in the middle. An example of this is supermarkets because their ________ structure is ________ than discount retailers, and customers do not value their products and services as being high-end such as those offered by Whole Foods.

The text discusses three approaches to combining overall cost leadership and differentiation competitive advantages. Which of the following is not one of these three approaches?

A firm can differentiate itself in a support activity by purchasing high-quality components to enhance product image such as Apple does with its laptop computers.

A market that mainly competes on the basis of price and has stagnant growth is characteristic of what life cycle stage?

Underestimating expenses associated with coordinating value-creating activities in the extended value chain can be a result of ________ integration of cost leadership and differentiation.

Mass customization permits companies to manufacture unique products in relatively ________ quantities at ________ costs.

Discuss how each stage of the industry life cycle (introduction, growth, maturity, and declinecan play a role in decisions that managers must make at the business level. Provide anexample for each stage.

With experience, unit costs of production decline as ________ increases in most industries.

Research has consistently shown that firms that achieve both cost leadership and differentiation advantages tend to perform

An overall low-cost position enables a firm to achieve ________ returns despite strong competition.

Marlin Steel Wire Products is a manufacturer of commodity wire products out of Baltimore, MD. Marlin has many rivals based in China and other emerging markets. The company cannot compete on labor costs so it used a ________ strategy to automate its production and now specializes in high-end products.

Atlas Door created competitive advantage by reducing the time to receive and process an order and through installing a just-in-time logistics operation. Which of the following is not areason for their favorable position relative to the five forces of industry competition?

High product differentiation is generally accompanied by